Oklahoma Attorney General Sues Autodialer Marketer

The Oklahoma Attorney General's Office has filed a lawsuit against autodialer marketer CTI Business Management, which it accused of abusing automatic dialing equipment and encouraging customers to do the same.

According to the state attorney general, Houston-based CTI used autodialers to send prerecorded messages to Oklahoma businesses to sell its automatic dialing machines in violation of the law. Oklahoma and federal law prohibit telemarketers from using autodialer devices without live operators unless a previous business relationship with the consumer exists.

The lawsuit further accuses CTI of selling its equipment to Oklahoma businesses but failing to inform them of the law, thus encouraging them to commit violations. According to the state attorney general, CTI failed to advise its customers of the law even when customers told the company of their intentions to send prerecorded messages.

When customers later asked for refunds, CTI refused and advised them instead on ways to evade the prerecorded message ban, according to the attorney general. The lawsuit, filed in county court in Oklahoma, seeks an injunction against CTI to discontinue its marketing practices and to pay back affected business owners.

CTI also was accused of failing to register as a telemarketer in Oklahoma as is required by state law. Calls to CTI's address in Houston, where the Oklahoma attorney general's office served its lawsuit, were not returned.

In typical prerecorded message cases, law enforcement authorities pursue the company that placed the call in violation of the law, rather than the companies that market or manufacture the calling equipment. In this case, Oklahoma has taken the unusual step of seeking to hold the provider of automatic dialing equipment accountable for violations made with its products.

Municipal governments recently tried to hold gun manufacturers accountable for crimes committed with firearms, said Richard Capriola, an attorney specializing in marketing law with Atlanta-based firm Weinstock & Scavo. Several cities banded together to sue gun makers for the costs associated with enforcing laws against crimes committed with guns.

The lawsuit failed because the cities were unable to prove that gun makers should have been able to foresee the crimes that would be committed with their firearms, Capriola said. An analogy could be drawn to Oklahoma's case against CTI.

"There were too many links in the chain to tie them all together," Capriola said of the lawsuit against gun manufacturers. "It seems like (Oklahoma) would have the same problem."

Another problem with charging autodialer marketers for complicity in violations committed with their products is that, like laws concerning fireworks, each state has its own rules concerning their use, Capriola said. A state can't sue a business located in another state because its products are banned in the first state's territory.

However, Oklahoma assistant attorney general Tom Bates, who administers the state's no-call registry, said that in CTI's case the company told its customers that sending the prerecorded messages would be legal. The statement constitutes an unfair and deceptive marketing practice, he said.

"You can't draw blanket assumptions from this case," he said. "We filed it because of the specific facts of this case."